Rim backdating stock

RIM made its initial public offering of stock in 1997.It would appear that governance practices did not evolve when RIM evolved from being a private corporation to a public corporation.An executive sitting on the board, and directors selected or anointed by executives will undermine the effectiveness of any professed corporate governance reforms.

"The first point he hammered home was that separation of executive and board functions was desirable, if not critical.To RIM's credit, it has announced that "A new Oversight Committee of the Board will be established, comprised exclusively of independent directors, whose mandate will include providing oversight into areas typically under the responsibility of management.Among other things, the Oversight Committee will examine executive compensation, the use of stock options as a compensation mechanism, trading by insiders, hiring practices and a general review of activities within the accounting and finance groups." One can only hope that this new Oversight Committee will be objective and will have the ability to enforce accountability.Moreover, said Doyle, boards led by or dominated by company executives tend to be ineffectual -- all the more so when, as in the case of RIM, the CEOs are not only board members, but company founders and major shareholders." This governance practice of separating the role of board chair and CEO, is particularly desirable in publicly-traded corporations where the profit interests of founders who continue to hold both chair and CEO positions might conflict with the interests of shareholders.A conflict of interest may not be a problem and may therefore not be a required practice when the corporation is privately held.

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